Qatar's M2 grew by 17.1 percent in 2011 and 19.1 percent in the year until August 2012, to reach $ 101 billion. This is because the trends in hydrocarbon wealth creation and government spending were particularly strong in Qatar, driving rapid credit growth.

As a result, quasi-money went up substantially.In response to this strong growth in money supply, Qatar Central Bank started issuing treasury bills in May 2011 to lap up the excess domestic liquidity and also to help build a Qatari riyal yield curve. Money supply in Saudi Arabia, which is the largest in the GCC region, showed a more mild growth of 4.7 percent in the year up to August 2012. The gains came mainly from an increase in the currency in circulation and demand deposits. Saudi Arabia has a different money supply make up to other GCC countries, with a predominance of shorter-term deposits.

As a result, M1 took a 78 percent share of the broad money supply in Saudi Arabia as at August 2012.Money supply growth in the UAE has recovered; however, it is affected by the significant investments in the real estate sector and the pick-up in real estate activity in recent months, which has led to increased credit to the sector.Driving the overall money supply growth in the GCC has been the expansion in credit, which increased for the GCC region by 7.8 percent for the year up to August 2012 to reach $ 833 billion.

Qatar had the most rapid credit growth in the region, with loans extended by banks going up by 18.5 percent in the year up to August 2012 to $ 131.4 billion. The loans disbursed by banks in Saudi Arabia went up by 12.2 percent to reach $ 256.2 billion as at August 2012. In the UAE, which has the largest loan book in the region, overall lending moved up by 1.8 percent to $ 296.9 billion as at August 2012. With huge project financing needs coming up over the next decade, GCC countries have been successful in obtaining credit lines though international project financing syndications.

The corporate debt capital markets have also emerged as a good funding option. During the year up to August 2012, debt issuance in the MENA region reached a record level of $ 28.2 billion, according to data from Dealogic. The GCC countries are considering further developing their own domestic debt capital markets and there is also potential for local banks to collaborate to a greater extent by offering more syndicated loans, according to QNB Group.